CHAPTER 2 LITERATURE REVIEW
2.3. Theories on Satisfaction
2.3.1. Concepts of Customer Satisfaction
There are many definitions for the term “customer satisfaction”. Kotler (2003) defined satisfaction as “a person’s feeling of pleasure or disappointment resulting from comparing a product’s perceived performance (or outcome) in relation to his or her expectations” (p.36).
According to Smith (1969), satisfaction with a service is the feeling a person has on a service.
Hansemark and Albinsson (2004) defined satisfaction as “anoverall customer attitude towards a service provider, or an emotional reaction to the difference between what customers anticipate and what they receive, regarding the fulfillment of some need, goal or desire”.
Kotler & Keller (2006) suggested that there are three levels of satisfaction: (1) if customer perceptions are lower than customer expectations, they feel dissatisfied; (2) if customer perceptions are equal to customer expectations, they feel satisfied; (3) if customer perceptions are higher than customer expectation, they feel satisfied and excited.
Although there are many concepts of satisfaction, the satisfaction is usually attached to the following factors: attitude toward the service provider; customer expectations on the services; service performance result, or the values that a service can provide customers;
intention to keep using a service or not.
In marketing, there are also many definitions of customer satisfaction. Banchelet (1995) defined customer satisfaction as an “emotional reaction by the consumer in response to an experience with a product or service” (p.81). According to Hoffman & Bateson (2006), customer satisfaction is the comparison of customer expectations to perceptions on service. If perceptions are equal or higher than expectations, customers will feel satisfied.
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Thus, service quality refers to the characteristics satisfying customer, and satisfaction refers to emotional reaction to using a service or product. From the above definitions, it can be said that managing customer expectations and increasing customer perception are very important tasks in improving customer satisfaction. Customer expectations play a central role in affecting customer satisfaction upon a service. Thus, it is important to identify factors that influence customer expectations. According to Public Service Renovation Department of England, customer expectations consist of 5 factors: (1) personal needs; (2) word of mouth; (3) previous experience; (4) explicit service promise; (5) implicit service promise.
Personal needs are what customers expect to be satisfied. Different individuals will have different expectations on different services. Therefore, it is difficult to understand all the personal needs on service.
Previous experiences on a service will affect future customer expectations on service.
Customers who are experienced in using services tend to not put high expectation on service quality, thus, they tend to have higher satisfaction.
Word of mouth: the communication between relatives, friends or coworkers will spread information quickly and affect customer expectations.
Explicit service promise: all statements or promises of organization on their services, along with the public relation, will directly influence customer expectations.
Implicit service promise: all tangible identifications such as infrastructure, logo, etc. that may lead to higher expectation on service quality.
Understanding customer expectations is very important for service providers to address how to satisfy customers. For marketers, this is a topic that is frequently studied to better manage customer expectation and customer perception, thus, improving customer satisfaction.
2.3.2. Distinction between customer satisfaction and service quality
Customer satisfaction refers to the emotional reactions appear when customers use a service; service quality refers to providing service and concentrating on specific elements of service (Zeithaml& Bitner, 2000). Customer satisfaction is a short-term reaction while service quality usually a long-term experience.
Studies showed that there is a causal relationship between service quality and customer satisfaction (Cronin & Taylor, 1992; Kotler, 2006; Zeithaml& Bitner, 2000). Nguyen (2006) claimed that higher service quality will lead to higher customer satisfaction.
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2.3.3 Assessment model of customer satisfaction and service qualitySERVQUAL model
Parasuraman et al. (1985) proposed the GAP model of service quality. They claimed that the service gap is the gap between service expectations and service perception. Parasuraman et al. (1985) suggested that service expectations are affected by 3 factors: (1) word of mouth; (2) personal needs; (3) past experience. Customers who have high expectation on service will normall have lower satisfaction with the service provided.
Based on the GAP model, Parasuraman et al. (1988) introduced the SERVQUAL quality scale with 10 determinants including reliability, access, credibility, communication, competence, responsiveness, understanding, courtesy, security and tangibles. Although these 10 determinants can cover most of the aspects of service, it is difficult to measure or apply all these determinants in many cases. Thus, Parasuraman et al. (1988) modified their original model into a new model with 5 factors: (1) tangibility; (2) reliability; (3) responsiveness; (4) assurance; (5) empathy. Parasuraman et al. (1988) divided these 5 factors into 44 variables for customer expectations and 22 variables for customer perceptions. Then, they proposed the formulation of service quality as the follow:
Service quality = Perceptions - Expectations
After various tests, Parasuraman et al. (1988) finally reduced the number of variables to 21 observed variables for their model. Parasuraman et al. (1988) claimed that SERVQUAL is a proper scale for service quality and it can be used in different service fields.
ACSI model
The American Customer Satisfaction Index was developed by Fornell et al. (1996). This is a popular index for customer satisfaction in 10 different economic sectors. ACSI model includes 17 questions related to customers’ perceptions of the value and quality of a product or service in comparison to their ideal expectations. The ACSI model is shown in Figure 2.2
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Figure 2.2 Customer satisfaction measurement model for public service in England In 2004, the Public Service Renovation Department of England introduced the customer satisfaction measurement model as shown in Figure 2.3
Figure 2.3: Customer satisfaction measurement model for public service in England Expectations
Perceived Quality
Perceived Value
Customer Satisfaction
Customer Complaints
Customer Loyalty
Service Delivery
Time
Information
Profesionalism
Employees’
Attitude
Customer Satisfaction
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This model accurately explained 67% of the factors influencing customer satisfaction on public service. Service delivery is the factor affecting customer satisfaction the most, followed by time, information, professionalism, and employees’ attitude.